11 88 0 Solutions AG — Earnings Release 2007

Nov 7, 2007

News Details

Corporate | 7 November 2007 07:54

telegate AG: telegate continues positive trend in profitability and cash flow – 9 month results underline solid business performance

telegate AG / Quarter Results

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During the first nine months of 2007 telegate confirms its successful
track. With sales in line with last year, telegate managed to raise
profitability and free cash flow, whilst making vital progress toward
expanding its business in commercial advertisement sales.

During the reporting period telegate Group generated sales of 131.5 million
Euro (9 months period 2006: 133.8 million Euro). Growth rate comes close to
6 percent when adjusted by the outsourcing sales made with the French
mobile telecommunication partners SFR und Bouygues Telecom that do not
affect net income but were still included in the comparative period of the
previous year. Earnings before interest, taxes, depreciation and taxes
(EBITDA) rose sharply over the same period to 36.3 million Euro (9 months
period 2006: 4.7 million Euro). The good quality of earnings is even more
evident for earnings after taxes: at 25.3 million Euro telegate was clearly
up year-on-year (9 months period 2006: -4.0 million Euro). Direct
comparison of the quarters also confirms this positive development:
earnings after taxes for the third quarter 2007 came to 9.7 million Euro
(Q3 2006: 5.4 million Euro), with EBITDA at 12.8 million Euro (Q3 2006: 9.3
million Euro).

The development of free cash flow is also extremly healthy. At 43.2
million Euro it reached a new record level for the nine month period, (9
months period 2006: -23,4 million Euro). This in turn results in higher
free liquidity of 53.0 million Euro per September 30, 2007. This figure
also includes payment of 12.3 million Euro by Deutsche Telekom AG for legal
claims brought for excessively charged data costs over the years 1997 to
2004. As these monies were paid subject to an enforceable legal verdict
they are as yet booked not affecting earnings.

All three business segments of telegate Group contributed toward this
positive performance with their different focal points.

The segment Germany/Austria saw the performance in the new business lines
value-added telephone services and advertisement sales outperform
expectations and balancing declining revenues from the classical core
business. With sales of 85.3 million Euro (9 months period 2006: 85.7
million Euro) the segment clocked up an EBITDA of 34.1 million Euro (9
months period 2006: 27.4 million Euro).

The business segment Italy/Spain continues its positive development. Sales
are up by 19 percent to 29.7 million Euro (9 months period 2006: 25.0
million Euro) with profitability also significantly up. EBITDA comes to 5.1
million Euro (9 months period 2006: 3.7 million Euro), which constitutes a
plus of almost 38 percent.

The general trend for the French segment is also encouraging. Adjusted
sales in the reporting period increased to 16.5 million Euro (9 months
period 2006: 13,4 million Euro) and the third quarter also posted for the
first time a break-even of earnings. For the first nine months the EBITDA
incurred in this segment therefore continue to -3.0 million Euro (first
nine months of 2006: -26.4 million Euro).

All in all, telegate Group remains optimistic on the further development of
its business. The strategic expansion of the product portfolio, especially
in the sectors Internet and mobile services are promising as are the
progresses made in sales of commercial advertisement entries. The forecast
for the full fiscal year 2007 continues to remain positive, with telegate
expecting to generate an EBITDA close to 50 million Euro.

Claudia Strixner
Head of Public Relations
telegate AG
Fraunhofer Strasse 12a - 82152 Munich-Martinsried/Germany
Tel.: ++49 (0)89/8954-1188 - Fax: 089/ 8954-1189
E-mail: claudia.strixner@telegate.com

07.11.2007 Financial News transmitted by DGAP

Language: English
Issuer: telegate AG
Fraunhofer Str. 12a
82152 München-Martinsried
Deutschland
Phone: +49 089 - 89 54 0
Fax: +49 089 - 89 54 10 10
E-mail: info@telegate.de
Internet: www.telegate.com
ISIN: DE0005118806
WKN: 511880
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart

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